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Grocery stores prioritizing online ordering, home delivery as millennials take over market

Looking back, 2018 may be remembered as the year online shopping for groceries became a thing in Canada.

The country’s largest grocers have made significant investments in technology and supply systems that allow customers to order online and pick up in store or have groceries home delivered, or they have paired up with delivery services, including low-cost leader Walmart.

It’s a trend that will only grow as millennials take over the marketplace once dominated by baby boomers and time becomes increasingly more important than money, according to speakers at this week’s annual national retail conference in Toronto.

“Shoppers used to agree to inconvenience for a better deal. The new paradigm is convenience is king and time is money,” said Ann Mack, director, Facebook IQ, presenting at the Retail Council of Canada conference held this week.

About 2,500 retailers attended the annual event held at the Congress Centre on Tuesday and Wednesday.

Google searches for “same-day shipping” have doubled in Canada over the past two years, Eric Morris, director, retail, Google Canada, told participants.

And as the time it takes to load a page stretches from one second to three seconds, the probability that a shopper will abandon the page increases 32 per cent, according to research cited by Morris.

That means that as many as a third of consumers won’t wait three seconds to get the information they want.

“Canadian shoppers are extremely impatient,” said Morris, adding that they want what they want right away.

And increasingly, they want it via mobile: by 2020, more than half the world’s population will be connected to the internet, millennials will make up half the workforce and 70 per cent of e-commerce will be conducted on mobile devices, according Facebook’s Mack.

Family-owned Longo’s was an early leader in grocery home delivery, purchasing Grocery Gateway in 2004.

Loblaw Cos. Ltd. has become a national leader in the space since debuting its first click-and-collect service (recently rebranded as PC Express) in the GTA in 2014. It now offers home delivery through Instacart in 13 markets across Canada, including the GTA and plans to expand the number of sites where shoppers can pick up their orders placed online to more than 700 locations by the end of 2018, from about 430 today. It had about 200 at the beginning of the year.

On Thursday, it launched its PC Express service in nine Shoppers Drug Mart stores in the GTA.

The company is aiming to offer PC Express and home delivery to 90 per cent of customers in major urban markets by the end of the year, chair and CEO Galen G. Weston told the company’s annual general meeting in May.

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Metro offers delivery and click-and-collect services to shoppers in 60 per cent of Quebec, where the retailer is based, and plans to launch similar offers in Ontario in 2018, according to a spokesperson.

Sobeys offers online ordering and home delivery at its Thrifty Foods banner in B.C. and at its IGA banner in Quebec. It does not offer the service in Ontario, but customers at their FreshCo and Sobey’s Urban Fresh banners can have their groceries delivered by Inabuggy, which recently rebranded from Instabuggy, for a fee.

Walmart offers free pickup for online orders at dozens of Walmart stores across Canada and at Penguin Pick-Up locations, including Penguin locations in Toronto neighbourhoods where there is no Walmart store such as Harbourfront.

It offers home delivery in 10 GTA communities, including several Toronto neighbourhoods, using both its own trucks and crowdsourced delivery services like JoeyCo.

“From my perspective I think it’s definitely something that has tremendous potential as a business. It does seem like Canadian interest in this is going up,” said Daryl Porter, vice-president, omni-channel and customer experience, Walmart Canada.

Retail expert Doug Stephens says shopping for groceries is an ingrained behaviour that hasn’t changed all that much since grocery self-serve was launched as a new concept in the U.S. in 1916.

“It seems archaic,” said Stephens, author of the newly released Re-Engineering Retail, the Future of Selling in a Post-Digital World.

But he too believes time is becoming more important, and people don’t want to spend it running to the grocery store 2.2 times a week as they do now.

Stephens believes that five years from now consumers will be getting the products they use routinely delivered on a regular basis, such staples as diapers or flour or potatoes. They’ll still want to shop for some food, particularly fresh food, but they will be looking for a better experience than they get today.

“When we want to go to the store it will be for entertainment and inspiration,” said Stephens, pointing to the Eataly concept — which offers dining and groceries — as an example of what shoppers might be looking for.

Inabuggy CEO Julian Gleizer says demand for online grocery delivery has soared in 2018. Inabuggy now delivers from 38 stores in 30 regions across Canada, including higher-end grocers like McEwan and discount grocers such as Walmart, LCBO, Rexall pharmacies and Kitchen Stuff Plus.

“It’s definitely gaining momentum. Things are changing very quickly — people don’t have time to go shopping, and a lot of people find that it’s a way to buy your time back.”

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